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Bull of the Day: ANGI HomeServices (ANGI)

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Shares in ANGI HomeServices (ANGI - Free Report) made significant gains early on Thursday after an impressive quarterly earnings report, though they sold off later with the broader markets.

Shares in ANGI are still up a whopping 75% in 2018 versus a gain 5% in the S&P 500.

Net earnings came in at $0.09/share, inline with the Zacks Consensus Estimate, and total revenues were $303M, 2% higher than the consensus and 67% higher than the year-ago period.

ANGI HomeServices is a subsidiary of interactive Corporation (IAC - Free Report) and includes the popular sites Angie’s List, HomeAdvisor and the recently acquired Handy which match consumers with qualified contractors, technicians and service professionals. They also operate eight other sites serving the US, Canada and Europe and have attracted over 15 million customers over the past 20 years.

Parent company IAC owns and operates approximately 150 brands - mostly in the internet space - and has been aggressively adding promising companies to its expanding portfolio. Most notably, IAC also operates the Match Group (MTCH - Free Report) which specializes in dating apps – including the wildly popular Tinder Service.

At their core, home services and dating services are actually quite similar, using technology to introduce two parties who may not have had any opportunity to meet for a mutually beneficial relationship and also using experience in internet marketing to attract new users to their sites.

IAC and Match have successfully fought off a planned expansion into the dating space from social-media giant Facebook (FB - Free Report) and they remain the most popular suite of dating apps on the market. IAC is applying that same market and media savvy approach to the HomeServices division.

Thanks to an aggressive strategy of acquisitions, ANGI is expected to more than double its revenues in 2018 to $1.15B and increase them further to $1.4B in 2019. The company is able to take advantage of significant economies of scale – using the same basic infrastructure as the backbone of the operation, while tailoring the individual user experience at its many sites to appeal to as wide an audience as possible.

Even going into the latest report, recent upward earnings revisions earn ANGI a Zacks Rank #1 (Strong Buy) and that trends looks likely to continue as the company continues to build market share in the $400B billion home services market in the US as well as abroad.

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